Chaoke.com is in debt of millions of dollars, and users are blocked from withdrawing money

Text: Hoho

Source: Fengchao Finance

Before the digital asset trading platform ChaoEx was rumored to have "run away", the "coin jam" phenomenon on the platform had existed for more than a year, and users' dissatisfaction finally broke out on March 30.

Two days later, Jin Jingguo, the founder of Chaoke.com, admitted in his circle of friends that the platform was in financial difficulties and had a funding gap of one million US dollars.

It is not difficult to find out from the chat records of the official Telegram group of Chaoke.com that since the beginning of 2019, users have reported in the community that they cannot withdraw money and their accounts are frozen. The explanations given by the platform staff have also changed. At first, it was "the efficiency of manual review is slow", and later it was "the system is updated" and "the finance is being audited".

Despite frequent inquiries from users for more than a year, the "coin stuck" problem of Chaoke.com has never been effectively solved. The issuance of two platform coins in nearly three years has failed to save the decline, and the sharp drop in the two coins has now become the "evidence" for users to accuse the platform.

Jin Jingguo told Fengchao Finance that asset theft and user arbitrage were the main reasons for the platform's financial crisis, followed by the platform's wrong decisions. So far, 200 people have been blocked from withdrawing their coins. "I will use all means to fill this gap and provide a plan and community discussion that will allow everyone to withdraw their coins."

Before the solution was released, users continued to question the company. How to regain trust became a difficult problem facing Jin Jingguo and Chaoke.com.

"I will prepare a solution and discuss it with the community in a day or two." Jin Jingguo, who was caught up in rumors of "running away", appeared in his circle of friends on April 1, admitting that the financial situation of the Chaoke.com platform he founded was in chaos, and disclosed two thefts and a robot bug, but denied the accusation of misappropriating user assets and debts of hundreds of millions of BTC.

In an interview with Fengchao Finance, he said that the platform had a debt of about 1 million US dollars.

Jin Jingguo's plan has not yet been released, and it is still unknown whether users will be satisfied. Investors' rights protection groups and condemnations of Chaoke.com for "running away" broke out at the end of March.

On March 30, the self-media "Bitcoin Emperor Jiang" posted on Weibo that the founder of chaoex.info, Jin Jingguo, was suspected of running away and the number of victims had reached hundreds.

Investor Wu Han (pseudonym) told Fengchao Finance that on October 3, 2017, he recharged a batch of digital assets to Chaoke.com. As of now, there are still 160,778 NULS (Nuscoin), 0.2 BTC (Bitcoin) and 0.28 ETH (Ethereum) stored on Chaoke.com and cannot be withdrawn. The market value of the stuck assets exceeds US$32,000.

There are many investors who have the same experience as Wu Han. Fengchao Finance sorted out the chat records of the official Telegram group of Chaoke.com and found that since the beginning of 2019, users have reported in the community that they cannot withdraw money and their accounts have been frozen.

The platform staff's explanation changed from "slow manual review efficiency" and "system update" to "financial audit" later. For more than a year, the "stuck currency" problem of Chaoke.com has not been effectively solved, causing users to frequently ask questions.

Investors’ withdrawal difficulties continued until March this year. “Some people successfully withdrew their money during this period,” said investor Zhao Lu (pseudonym) after communicating with other users. He believed that users who withdraw large amounts of money generally find it difficult to pass the platform’s withdrawal review.

Zhao Lu claimed that he had been unable to withdraw his money from the cryptocurrency exchange for a year. “At first I would wait patiently,” he said after reading Jin Jingguo’s explanation, “but now I have no hope.”

Zhao Lu is not the only one who has “lost patience”. Recently, Wu Han wrote about his personal experience and forwarded it to the rights protection group, calling on people who have the same experience as him to go to the police station to report the case. Just like what the rights defenders of FCoin did, someone has already “human fleshed out” Jin Jingguo’s personal information and his family information.

When the platform’s year-long trust crisis broke out, Jin Jingguo’s belated statement did not help him much.

Chaoke.com was founded in June 2017. In terms of time, it can be regarded as a veteran exchange in the cryptocurrency circle. However, judging from the number of users and funds, it is not ranked high in the industry. It is not found on cryptocurrency data platforms such as Feixiaohao and Coinmarketcap, but the platform gathers early users.

The five major rights defenders contacted by the self-media Blocklike are all early participants who entered the cryptocurrency circle around 2013. The founder of the platform, Jin Jingguo, is also a veteran in the cryptocurrency circle. He entered the market as early as the end of 2013 and worked for Hong Kong Navigation Network and Bixu Network.

The most critical aspect of an exchange is asset security. According to Jin Jingguo, the Chaoke.com he led fell into various pitfalls, including asset theft, robot bugs, and "extortion" by colleagues.

Blocklike quoted an insider as saying that Chaoke.com had experienced a financial crisis as early as May 2019, when millions of coins were stolen from the exchange. In desperation, Jin Jingguo misappropriated user assets to gamble on football. There were also claims that his position was liquidated after futures trading, which led to an increasing funding gap and a vicious cycle.

On April 2, Fengchao Finance contacted Jin Jingguo. He denied the rumors of gambling and liquidation, and he also admitted that the source of the problem was indeed him.

He said that the theoretical maximum debt of the site is about 1 million US dollars, not 100 million yuan as rumored.

“I looked at the data and there are only about 200 customers whose withdrawal applications have not been processed. It is true that the platform is in financial crisis, but we are not going to solve any of them. It’s just that we cannot take care of all aspects immediately. Therefore, we plan to launch a solution in the near future to ensure that everyone can withdraw their assets smoothly.”

Kim Kyung-guk did not reveal the details of the plan, only saying, "I tried every possible way to fill this gap."

Jin Jingguo attributed the cause of the crisis to the theft of platform assets and user arbitrage.

"Chaoke.com has had two experiences of having its coins stolen. The first time, the amount of coins lost was not much. The most recent one happened in the middle of last year. After the incident, the platform reported the case to the police. The second one happened at the beginning of last year. Due to a problem with a third-party robot, the platform was maliciously arbitraged about $800,000 in assets."

Jin Jingguo said that they only recovered about 200,000 US dollars, but the fund gap in the account was close to several million. As for his own responsibility, he was wrong in concealing the platform's debt crisis and the subsequent wrong operation strategy, "which is the reason for the aggravation of the problem."

He refused to reveal what the so-called "wrong strategy" was. One fact is that a few months after Chaoke.com had a huge funding gap, it launched its second platform token CHE.

According to Chaoke.com users, the first platform token CHEX has the same name as the Chaoke.com Foundation. CHEX was launched on January 17, 2019, with an opening price of $0.0067 and is currently quoted at $0.0018, a drop of 73%.

CHE, which was issued later, also suffered from the plunge. Its initial issue price was 0.002 USDT. After more than ten days of listing, the price of CHE rose to 0.012 USD, an increase of 500%. However, the rise did not last long. The price fell all the way to the current 0.0039 USD, which is higher than the issue price and a 67% drop from the historical high.

CHE and CHEX are still available for trading on Chaoke.com

Today, the history of the sharp drop in the price of CHE and CHEX has become one of the charges used by rights defenders to accuse Chaoke.com.

In the official white paper, CHE and CHEX are both official tokens issued by the Chaoke.com Foundation. Jin Jingguo explained that CHE is actually a point and is deeply tied to the platform’s auction function. “CHEX has some historical reasons, but it is not abandoned. Our original intention was to develop it as a bonus benefit.” Jin Jingguo explained the difference in positioning of the two platform tokens.

According to his promise, the plan to "ensure that assets can be withdrawn smoothly" will be presented to users. This is also the problem that rights defenders are eager to hope that Chaoke.com can solve.

"It's hard to trust him anymore," said a user who is already preparing a police report.

The credit-endangered cases of Jin Jingguo and Chaoke.com have once again demonstrated the risks in the exchange startup sector.

What other “card currency” exchanges do you know?

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